Revised June 2, 2014
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Health insurance is a big concern for anyone facing layoff. As soon as you get a notice of layoff, contact your plan sponsor (either your employer's personnel office or your benefit fund) to determine the date when your insurance coverage will cease and to obtain information on your options. That should include the new COBRA notices concerning COBRA rights and how they interact with the new marketplaces.
You have two primary options for coverage if you lose your job-based health insurance as a result of losing your job or a reduction in hours.
- Purchase coverage on the new individual marketplace created by the Affordable Care Act.
- Continue your current job-based coverage through COBRA or New York "Mini COBRA".
Remember that beginning in 2014 most people must have minimum essential health insurance coverage or pay a tax penalty. The penalty for 2014 is the greater of $95 per adult per year or 1 percent of income. In subsequent years the penalty amount is increased. Although there is no penalty for a gap under three months, it is still important not to delay in finding replacement health insurance.
Option One: Individual marketplace health insurance plans
What is the marketplace?
The marketplace is an online tool to assist individuals in shopping for health insurance coverage. The marketplace in New York is called the New York State of Health. A variety of health insurance products are offered by private insurance companies designed to cover 90 percent, 80 percent, 70 percent or 60 percent of covered services. These products are known as the "metal" plans; platinum, gold, silver and bronze. There is also a catastrophic plan for people under age 30. The marketplace is not for people who have Medicare as their primary coverage.
When can a person enroll?
You can purchase marketplace coverage outside of the annual open enrollment period if you have a qualifying life event such as loss of coverage due to layoff or reduction in hours. You must have been enrolled in coverage the day before the layoff date; to enroll for dependent coverage, your previous coverage must have included and covered your spouse and dependents. You may wish to consider the marketplace plans instead of COBRA if you are eligible for possible income-related premium subsidies in the marketplace. Generally you have 60 days from the date of the life qualifying event to enroll, but the earliest date that coverage is effective is the first day of the following month following the coverage loss. If you are aware of an upcoming loss of coverage, you should enroll prior to the end of coverage to minimize any gap. Unlike COBRA, marketplace coverage is not retroactive to the date the coverage terminated.
If you elect COBRA following a loss of coverage, you must wait until the next marketplace open enrollment period beginning Nov. 15 for effective dates in 2015 or when COBRA benefits are exhausted. Voluntary termination of COBRA is not considered a qualifying event.
What is covered?
The marketplace plans primarily cover only medical and prescription drug. Although the plan will not be the same as your job-based coverage all marketplace plans cover 10 essential benefits:
- Ambulatory patient services
- Emergency services
- Maternity and newborn care
- Mental health and substance abuse disorder services including behavioral treatment
- Prescription drugs
- Rehabilitative and habilitative services and devices
- Laboratory services
- Preventive and wellness services and chronic disease management
- Pediatric services, including oral and vision care
There are no exclusions for pre-existing conditions.
Are there subsidies for people covered on the marketplace?
Premium tax credits and lower cost sharing (deductible, co-pays, etc.) may be available on a sliding scale depending on your household size and income. You may not be eligible for tax credits if you are eligible for other group coverage through a spouse if the spouse's coverage is considered affordable and comprehensive under the Affordable Care Act. Even if you are not eligible for a tax credit, you can still enroll in the marketplace and pay 100 percent of the premium.
You can also purchase a plan outside of the marketplace, but you will not be eligible for any tax credits or lower out-of-pocket costs based on your income.
The marketplace also offers access to programs such as Child Health Plus and Medicaid and replacement products for Healthy New York and Family Health Plus which were discontinued. There is no limited enrollment period for these programs.
How do members find out more information?
You can access the New York marketplace at https://nystateofhealth.ny.gov . You can either enroll online or contact a personal navigator who will assist you. Navigators are certified, unbiased specialists whose job is to help people enroll. NYSUT Social Services, 800-342-9810, ext. 6206, is available to help NYSUT members locate a navigator.
Beware of scams and look-a-like websites. The official state websites can also be accessed through www.healthcare.gov.
Option Two: COBRA continuation benefits coverage
What is COBRA?
When health coverage provided by your employer ends, you may opt to continue your existing insurance coverage under COBRA continuation benefits. COBRA, or the Consolidated Omnibus Budget Reconciliation Act, says that if you lose your job for any reason other than "gross misconduct," you have the right to continue in your former employer's group plan for up to 18 months.
What types of benefits are covered under COBRA?
- Cafeteria plans
- Dental insurance
- Employee Assistance Programs that provide a specified number of visits
- Health insurance (examples: Indemnity, PPO, POS and HMO)
- Prescription drugs
- Vision care
- Health Reimbursement Arrangements (HRAs)
What are the eligibility requirements?
To be eligible for continued coverage, you must be covered under a group health plan until the day before the layoff occurs. If your employment began and was terminated before you were actually eligible for health insurance, you're not eligible for COBRA coverage.
For your spouse or dependents to be covered under COBRA, you must have selected a family plan; otherwise you will be covered by an individual plan and your spouse and dependents will not be eligible.
If my domestic partner is covered under my benefits, will COBRA allow him/her to retain coverage if I lose my job?
Your employer may opt to allow you to continue health coverage through COBRA of your domestic partner, but your employer is not required to do so.
Can I choose to only continue medical coverage under COBRA?
It depends. If the school district that you were laid off from offers separate health insurance plans (dental, medical, prescription or vision), you could choose which plans to continue. However, if the school district offered one plan with multiple health insurance benefits, you would not be able to choose.
When do I have to give notification to my employer that I want to continue health benefits under COBRA?
You have 60 days from the date coverage ends or from the date you are notified your coverage will end, whichever is later, to elect COBRA. Don't delay — health coverage is an important benefit and it's vital to protect your options.
How often must I make the premium payments for COBRA?
There is a mandatory monthly payment option, meaning you must be given the option of paying COBRA premiums on a monthly basis. You cannot be required to pay COBRA premiums on any other basis, such as quarterly, semiannually, or annually. The initial premium payment must be made within 45 days from the date of COBRA election.
What is the maximum coverage period for COBRA?
It varies. If your job was terminated, if you resigned voluntarily or if your hours were reduced, the maximum coverage time is 18 months for you, a spouse and dependent children.
In addition to the maximum coverage time, coverage will end if one of the following events occurs:
- The employer ceases to provide a group health plan to its employees;
- The laid-off employee fails to pay the required premiums in a timely manner;
- The laid-off employee becomes a covered employee under another group health plan; or
- The laid-off employee becomes eligible for Medicare.
What is New York's 'Mini-COBRA'?
This New York continuation of coverage law applies to individuals covered by group plans with less than 20 workers (not covered by federal COBRA) who lose coverage due to a job loss, reduction of work hours or loss of eligibility.
It also applies to all workers who have exhausted federal COBRA continuation benefits allowing them to extend their health insurance from 18 to 36 months. Please contact your employer for specific information.
The New York "mini-COBRA" is not mandated for self-insured health plans.
Beyond COBRA, there are other health insurance options
If you have lost health insurance benefits due to job changes and do not opt to continue coverage through COBRA, or the marketplace plans, here are some avenues you can check out:
1. Child Health Plus: Visit www.health.ny.gov/health_care/child_health_plus or call 800-698-4543
2. University student health insurance
3. Medicare: For persons 65 or older and disabled individuals, www.medicare.gov
4. Options for continued coverage for disabled dependents
5. Veterans Benefits: The Aid and Attendance program provides a monthly stipend for long-term care.
7. Individual health plans outside the marketplace. (Note that you will not be eligible for reduced premium or cost sharing based on your income)
Navigating these health plan options can be confusing. If you need assistance, please call NYSUT Social Services 800-342-9810, ext. 6206, for help in finding a plan that suits your family's needs.
NOTE: This represents a high-level overview of COBRA and marketplace health plans and does not constitute legal advice. For additional information, please visit the U.S. Department of Labor's website at www.dol.gov or call 866-4-USADOL.
Getting help with prescription drug costs
When you lose a job that had prescription drug benefits, you have the option of continuing that prescription coverage through COBRA — but the cost to you may be prohibitive.
NYSUT Social Services says another way to get help with prescription costs is to apply for subsidies through a specific pharmaceutical company's Patient Assistance Plan that can help some patients pay for medications. Many local health clinics have sliding scale fees. Some prescription drug options:
1. Patient Assistance Programs (PAP): Each drug company sponsors its own assistance plan. When you access the website you can see if the particular drug you need is available through a PAP. www.rxassist.org
2. Elderly Pharmaceutical Insurance Coverage Program (EPIC): This is a New York state program that helps seniors pay for their prescription drugs. You must meet income eligibility requirements.
Visit www.nyc.gov/html/caregiver/paying_5.html or call 800-332-3742.